Government borrowing ran £8.1bn above the official forecast in the financial year to August, three weeks before the 28 October Budget, as the 30-year gilt yield crossed 6%. Households, non-financial companies and overseas lenders were net lenders while the state borrowed 5.2% of GDP; one sector's borrowing is always another's lending. The strain shows in energy debt and arrears, bankruptcies and £6.6bn of council schools deficits.
Borrowing is £8.1bn over plan and long gilts cost 6%, so the 28 October Budget starts with less room.
Britain borrowed £77.3bn in the five months to August, £8.1bn more than the OBR had planned, the ONS reported on 22 September.
The Office for National Statistics said on 22 September that borrowing hit £77.3bn in the five months to August. That is £8.1bn above the Office for Budget Responsibility's plan.
Benefits and debt interest drive the miss, and index-linked gilts add to it. The forecaster's 28 October Budget baseline now starts from a bigger hole.
The 30-year gilt yield touched 6.02% on 7 October, a level first crossed on 1 October and last seen in 1998, yet every September auction sold.
United StatesThe 30-year gilt yield touched 6.02% on 7 October, a level it first crossed on 1 October and last reached in 1998. The 10-year closed at 5.38% on 6 October.
Buyers still filled every September auction. The National Institute of Economic and Social Research puts two-thirds of the 10-year's rise down to expected Bank Rate.
Households lent 2.4% of GDP between April and June while the state borrowed 5.2%, ONS sector accounts published on 30 September show.
The Office for National Statistics (ONS) sector accounts of 30 September show government borrowing at 5.2% of GDP in April to June. That compares with 4.2% in the first quarter.
Households lent 2.4% of GDP and overseas lenders 2.8%. Real income per head rose 1.0%, but the ONS credits benefits, not wages.
The MPC held Bank Rate at 3.75% on 16 September, with three members wanting 4%, and set a path to run the Bank's gilt holdings down to zero by 2034.
The Bank of England's Monetary Policy Committee held Bank Rate at 3.75% on 16 September, by six votes to three. The three dissenters wanted 4%.
The Bank also set a path to run its gilt holdings down to zero by September 2034. Its Financial Policy Committee said on 30 September that households and firms look resilient.
On Lowdown's sum of MHCLG returns, English councils' schools deficits reached £6.61bn, one and a half times their £4.33bn of unallocated reserves.
English councils spent £5.8bn over budget in 2025-26, yet their non-ringfenced reserves rose to £31.1bn, the Ministry of Housing, Communities and Local Government said on 17 September.
On Lowdown's sum of 292 returns, schools deficits reached £6.61bn. Sefton Council holds £3.2m against a £104m deficit.
John Healey ruled out rises in VAT, income tax and corporation tax on 7 September, then told Labour's conference he would meet the fiscal rules.
Chancellor John Healey took rises in value added tax, income tax and corporation tax off the table on 7 September. On 28 September in Liverpool he promised to meet the fiscal rules.
The Resolution Foundation puts debt interest at about £1 in every £12 of public spending. That leaves thresholds, smaller taxes, spending and welfare for 28 October.
Bankruptcies rose 14% and IVAs 8% on a year earlier in the Insolvency Service's August figures, published on 18 September.
The Insolvency Service said on 18 September that bankruptcies rose 14% and individual voluntary arrangements 8% on a year earlier. That is Lowdown's reading, after setting aside two moves with stated causes.
The individual insolvency rate reached 27.8 per 10,000 adults in the year to August.
Public-sector regular pay grew 6.3% in May to July and private-sector pay 2.9%, below August's 3.1% inflation, as payrolls fell 145,000.
Private-sector pay grew 2.9% in May to July against 6.3% in the public sector, the Office for National Statistics said on 15 September. August inflation was 3.1%.
Payrolls fell 145,000 on the year to 30.2 million. There are 2.5 unemployed people per vacancy, up from 2.3.
Audit Scotland found that Holyrood wrote £1.1bn of ScotWind fee drawdowns into three budgets from 2023-24 and reversed every one.
Audit Scotland said on 17 September that Holyrood budgeted £310m, £424m and £364m of ScotWind fee drawdowns in three straight years from 2023-24 and drew nothing.
The 2026-27 budget assumes £80m more. Crown Estate Scotland held £807.9m at the end of 2025-26, mostly on 12-month deposits.
Households owed energy suppliers £5.02bn at the end of June, up 13% on a year earlier, Ofgem's debt and arrears figures show.
Ofgem's indicators put household energy debt and arrears at £5.02bn at the end of June, up 13% on a year earlier.
About 1.19 million electricity accounts and 0.95 million gas accounts sat in arrears with no repayment plan. Average debts were £1,872 and £1,613.
The Treasury Committee said on 23 September that the OBR's critics were shooting the messenger, and asked ministers to consider a ten-year forecast.
The Commons Treasury Committee reported on 23 September that calls to overhaul the Office for Budget Responsibility (OBR) amount to "shooting the messenger". It suggests a ten-year forecast beside the five-year one.
Chair Meg Hillier said forecasts matter more when spending runs on "razor-thin margins". The OBR's next forecast arrives with the Budget on 28 October.
Reform UK's Robert Jenrick pledged £80bn a year of spending cuts in Birmingham and courted gilt holders with roadshows in London and New York.
United KingdomRobert Jenrick told Reform UK's Birmingham conference, which opened on 4 September, of an £80bn annual spending cut by the end of the next Parliament. He also wrote to big gilt holders.
Kemi Badenoch said Labour will run out of money. She wants defence at 3% of GDP, paid for from welfare.
Direction up. The trigger is the OBR forecast on 28 October: if it takes the overshoot into its baseline, the Chancellor must close the gap with thresholds, smaller taxes, spending or welfare, and the 30-year yield at 6.02% on 7 October gives the market a figure to test.
